One interesting thing is that properly run crypto custodians don't make the news, are 100% collateralized and can withstand 100% withdrawals in an orderly fashion. Many people in the crypto space could attest to that from various crowdfunds that distributed everything fine, or exchanges that told people to withdraw, or wound down.
In comparison, every bank in existence would have trouble with this.
Its strange that the high profile mismanaged companies that happened to be dealing in crypto are influencing this kind of exclusion from Federal agencies now. But its also validating that these accounts that are moving will be handled with care, and whatever crypto service those deposits are supporting will most likely be able to function fine. Assuming these were predominantly US-based stablecoins. (Circle’s USDC used to bank there)
Leveraged illiquid organizations with losses cannot withstand a collateral call. Whether that's a bank or a crypto exchange. Alternatives that remove or prohibit the leverage would be great.
In comparison, every bank in existence would have trouble with this.
Its strange that the high profile mismanaged companies that happened to be dealing in crypto are influencing this kind of exclusion from Federal agencies now. But its also validating that these accounts that are moving will be handled with care, and whatever crypto service those deposits are supporting will most likely be able to function fine. Assuming these were predominantly US-based stablecoins. (Circle’s USDC used to bank there)
Leveraged illiquid organizations with losses cannot withstand a collateral call. Whether that's a bank or a crypto exchange. Alternatives that remove or prohibit the leverage would be great.